Updated on: September 10, 2020

Avoiding Patient Status Denials for COVID Testing

Original story posted on: September 9, 2020

By now we’ve all heard the words “anyone who wants a COVID test can have one.” Occasionally, that claim is followed by the word “free,” or “no copay or deductible.”

Such statements make great news and sound bites, but it leaves people like me wondering: where’s the catch? Accepting a perfectly good public health reason to screen as many people as possible does not automatically translate into requiring providers to provide free services. The associated statements and assurances from payers, including the Centers for Medicare & Medicaid Services (CMS), leave me wondering.  For the past two months, I’ve been watching carefully to identify denial risks associated with COVID care.

Patient status is the obvious denial. Hospitals are already receiving denials for inpatient stays with COVID as a diagnosis. In many cases, these denials are completely consistent with the terms of the provider’s contract. Initially, COVID was a near-complete unknown for providers in the U.S. The spectrum of disease and clinical course was uncertain, and the at-risk population could arguably include a large part of the public – perhaps even a majority of people in the U.S. The Centers for Disease Control and Prevention (CDC) notes that 6 in 10 adults in the U.S. have a chronic disease, and 4 in 10 have two or more.

In this context, a general approach to admit, as inpatients, every suspected COVID patient may not seem unreasonable – to providers. It’s becoming clear that it seems unreasonable to many payers. Absent a reasonable expectation of a two-midnight stay, it will likely seem unreasonable to CMS as well. For this reason, my first area of concern is inpatient stays that lack sufficient documentation of medical necessity.

My next area of concern relates to telehealth services. CMS issued an interim final rule that greatly expanded available telehealth services. Many providers transitioned smoothly to a telehealth platform for a wide range of services. My concern is the ability to demonstrate medical necessity and patient benefit. This raises the question: when does a service that is worth less become worthless? An associated concern, specific to telehealth, is this: what happens if payers choose to transition to telehealth more broadly? Providers should begin assessing their ability to manage margins if payers decrease payments for telehealth, but leverage providers to make that a principal means of delivering services. Providers should consider the long-term possibility that mixed telehealth and physical services might be required by payers. This may leave providers with inadequate margins for the continued viability of the physical service.

To prepare for this, I recommend that all providers have a comprehensive assessment of costs associated with delivery of telehealth services, rather than simply rely on the related line item in their chargemaster.

The final concern regarding telehealth is documentation. Login and logout times serve as an absolute maximum duration for any encounter. As an example, a telehealth physical therapy visit with login-logout times exactly 30 minutes apart is unlikely to contain 30 minutes of actual therapy. In short, payers will look to additional documentation in an effort to “validate” time-based services.

My last concern overall is broad. Providers should anticipate denials in any claim that requires public health emergency (PHE)-specific documentation. Patients transferred to skilled nursing without a three-day acute-care stay are only eligible for this as a covered benefit if the providers document that the patient needed to be transferred as a result of the effect of the PHE. There are few areas where beds were in such short supply that this requirement might be met.

Some denials will be very quirky. In FAQs subsequent to the Families First Coronavirus Response Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security (CARES) Act, CMS noted that COVID diagnostic studies are covered for the “evaluation of a beneficiary for purposes of determining the need for such product, such as an X-ray.” But CMS also notes that X-rays are not covered, except as a COVID screening tool. Thus, if the X-ray is ordered after the COVID test, it may be denied as medically unnecessary. We should expect and prepare for such absurd outcomes.

John K. Hall, MD, JD, MBA, FCLM, FRCPC

John K. Hall, MD, JD, MBA, FCLM, FRCPC is a licensed physician in several jurisdictions and is admitted to the California bar. He is also the founder of The Aegis Firm, a healthcare consulting firm providing consultative and litigation support on a wide variety of criminal and civil matters related to healthcare. He lectures frequently on black-letter health law, mediation, medical staff relations, and medical ethics, as well as patient and physician rights.

Dr. Hall hopes to help explain complex problems at the intersection of medicine and law and prepare providers to manage those problems.

This email address is being protected from spambots. You need JavaScript enabled to view it.

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